NASHVILLE, Tenn., July 30, 2021 /PRNewswire/ -- Cat Financial
reported second-quarter 2021 revenues of $646 million, an increase of $5 million, or 1%, compared with the second
quarter of 2020. Second-quarter 2021 profit was $142 million, an increase of $83 million, or 141%, compared with the second
quarter of 2020.
The increase in revenues was primarily due to a $17 million favorable impact from returned or
repossessed equipment and a $7
million favorable impact from higher average earning assets,
partially offset by an $18 million
unfavorable impact from lower average financing rates.
Second-quarter 2021 profit before income taxes was $189 million, an increase of $100 million, or 112%, compared with the second
quarter of 2020. The increase was primarily due to a $75 million decrease in provision for credit
losses, a $25 million increase in net
yield on average earning assets and a $17
million favorable impact from returned or repossessed
equipment. These favorable impacts were partially offset by a
$31 million increase in general,
operating and administrative expenses, mostly due to higher
short-term incentive compensation expense.
The provision for income taxes reflected an estimated annual tax
rate of 25% in the second quarter of 2021, compared with 27% in the
second quarter of 2020.
During the second quarter of 2021, retail new business volume
was $3.52 billion, an increase of
$786 million, or 29%, from the second
quarter of 2020. The increase was mainly driven by higher volume in
North America, EAME and Mining,
partially offset by a decrease in Caterpillar Power Finance.
At the end of the second quarter of 2021, past dues were 2.58%,
compared with 3.74% at the end of the second quarter of 2020. Past
dues decreased across all portfolio segments as global markets
generally improved. Write-offs, net of recoveries, were
$54 million for the second quarter of
2021, compared with $30 million for
the second quarter of 2020. As of June 30,
2021, the allowance for credit losses totaled $402 million, or 1.46% of finance receivables,
compared with $441 million, or 1.64%
of finance receivables, at March 31,
2021. The allowance for credit losses at year-end 2020 was
$479 million, or 1.77% of finance
receivables.
"We were pleased with the continued improvement in portfolio
health and strong performance of our business during the second
quarter, reflecting good operational execution by the global Cat
Financial team," said Dave Walton,
president of Cat Financial and vice president with responsibility
for the Financial Products Division of Caterpillar Inc. "Our team
remains focused on executing the strategy to help Caterpillar
customers and dealers succeed through financial services
solutions."
About Cat Financial
Celebrating 40 years in 2021, Cat
Financial is a subsidiary of Caterpillar, the world's leading
manufacturer of construction and mining equipment, diesel and
natural gas engines, industrial gas turbines, and diesel-electric
locomotives. Cat Financial provides a wide range of financing
solutions to customers and Cat® dealers for machines, engines,
Solar® turbines, genuine Cat parts and services.
Headquartered in Nashville,
Tennessee, Cat Financial serves customers globally with
offices and subsidiaries located throughout North and South America, Asia, Australia, Europe, Africa and the Middle East. Visit cat.com to learn more about
Cat Financial.
STATISTICAL
HIGHLIGHTS:
|
SECOND-QUARTER
2021 VS. SECOND-QUARTER 2020
(ENDED JUNE 30,
EXCEPT TOTAL ASSETS)
(Millions of
dollars)
|
|
|
2021
|
|
2020
|
|
CHANGE
|
Revenues
|
$
|
646
|
|
$
|
641
|
|
1%
|
Profit Before Income
Taxes
|
$
|
189
|
|
$
|
89
|
|
112%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
142
|
|
$
|
59
|
|
141%
|
Retail New Business
Volume
|
$
|
3,524
|
|
$
|
2,738
|
|
29%
|
Total Assets at June
30 and December 31, respectively
|
$
|
32,541
|
|
$
|
31,991
|
|
2%
|
|
|
SIX-MONTHS 2021
VS. SIX-MONTHS 2020
(ENDED JUNE
30)
(Millions of
dollars)
|
|
|
2021
|
|
2020
|
|
CHANGE
|
Revenues
|
$
|
1,285
|
|
$
|
1,336
|
|
(4)%
|
Profit Before Income
Taxes
|
$
|
385
|
|
$
|
216
|
|
78%
|
Profit (excluding
profit attributable to noncontrolling interests)
|
$
|
282
|
|
$
|
149
|
|
89%
|
Retail New Business
Volume
|
$
|
6,333
|
|
$
|
5,050
|
|
25%
|
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain statements in this press release relate to future events
and expectations and are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "believe," "estimate," "will be," "will," "would,"
"expect," "anticipate," "plan," "project," "intend," "could,"
"should" or other similar words or expressions often identify
forward-looking statements. All statements other than statements of
historical fact are forward-looking statements, including, without
limitation, statements regarding our outlook, projections,
forecasts or trend descriptions. These statements do not guarantee
future performance and speak only as of the date they are made, and
we do not undertake to update our forward-looking statements.
Cat Financial's actual results may differ materially from those
described or implied in our forward-looking statements based on a
number of factors, including, but not limited to: (i) disruptions
or volatility in global financial markets limiting our sources of
liquidity; (ii) failure to maintain our credit ratings and
potential resulting increases to our cost of borrowing and adverse
effects on our cost of funds, liquidity, competitive position and
access to capital markets; (iii) changes in interest rates,
currency fluctuations or market liquidity conditions; (iv) an
increase in delinquencies, repossessions or net losses of our
customers; (v) residual values of leased equipment; (vi) our
compliance with financial and other restrictive covenants in debt
agreements; (vii) government monetary or fiscal policies; (viii)
political and economic risks, commercial instability and events
beyond our control in the countries in which we operate; (ix)
demand for Caterpillar products; (x) marketing, operational or
administrative support received from Caterpillar; (xi) our ability
to develop, produce and market quality products that meet our
customers' needs; (xii) information technology security threats and
computer crime; (xiii) alleged or actual violations of trade or
anti-corruption laws and regulations; (xiv) new regulations or
changes in financial services regulations; (xv) additional tax
expense or exposure; (xvi) changes in accounting guidance; (xvii)
the ongoing global coronavirus pandemic; and (xviii) other factors
described in more detail in Cat Financial's Forms 10-Q, 10-K and
other filings with the Securities and Exchange Commission.
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SOURCE Cat Financial